Tenant cannot squat on secured asset

The right of a tenant in a flat, which was mortgaged by a defaulting landlord borrower, came up in the Supreme Court in the case, Bajrang vs Central Bank of India. The residential flat in Mumbai was secured asset. Then the bank tried to take possession of it, invoking the Securitisation Act (Sarfaesi), the tenant obtained a stay against the landlord who sought his eviction. The bank alleged that the landlord and the tenant were in collusion to defeat its rights.

The Bombay High Court had given judgment in favour of the bank. The tenant appealed to the Supreme Court, which dismissed it. It ruled that the tenant was overstaying and the right of the secured creditor was above that of the tenant. Reflecting the bank’s argument, the court also observed that” such devious practices by the borrower to obstruct the rights of the bank cannot be appreciated.